- Customers will pay extra for broadband and mobile phone airtime bills
- The firm uses the RPI inflation index to set price rises, unlike most which use CPI
- Virgin Media O2 says rise is needed and still represents ‘fantastic value’
Broadband and mobile customers of Virgin Media O2 face price rises of 8.8 per cent from April, the highest increases in the UK.
Almost all internet and phone bills will rise from March to May this year as firms pass on costs linked to inflation, often with an additional charge on top.
Most firms are putting up these prices by an average of 7.9 per cent, which is the December consumer prices index (CPI) inflation figure of 4 per cent plus up to 3.9 per cent as an extra charge.
But Virgin Media O2 is putting up bills by 8.8 per cent from 1 April, the highest of all broadband and mobile price increases.
In the loop: Virgin Media’s broadband bills are set to rise by more than 8 per cent
This is because the firm uses a different measure of inflation to base its bill hikes on – the retail price index (RPI) measure for January 2024, which was announced as 4.9 per cent today.
On top of that, Virgin Media O2 adds 3.9 per cent, giving an increase of 8.8 per cent.
Virgin Media O2 is made up of Virgin Media broadband, and O2 for mobile phones and tariffs.
The firm said Virgin Media customers will see a price rise of an average £4.16 a month, which it defends by saying it is ‘around the cost of a takeaway coffee’.
A Virgin Media O2 spokesperson said: ‘This illustrates the fantastic value we continue to offer customers for connectivity that is used more than ever.’
Meanwhile O2 customers will see an price increase of 8.8 per cent, but only on the airtime element of their mobile bills.
This is because price rises are only applied to the part of a phone bill that pays for data and calls, not the handset itself.
The mobile phone firm said the overall monthly bill for customers will go up by 5 per cent in real terms.
| Firm | Average price increase | Applies to |
|---|---|---|
| Virgin Media O2 | 8.8% | Mobile, broadband |
| BT | 7.9% | Mobile, broadband |
| EE | 7.9% | Mobile, broadband |
| Plusnet | 7.9% | Broadband |
| Three | 7.9% | Mobile, broadband ( |
| Vodafone | 7.9% | Mobile, broadband |
| TalkTalk | 7.7% | Broadband |
| Sky | 6.7% | Broadband |
| Note: Social tariffs are not rising in price, SIM-only deal price rises will vary | ||
A Virgin Media O2 spokesperson said: ‘2023 was a record year for traffic on our networks as customers used our mobile and broadband services more than ever.
‘We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5million we invest every single day to upgrade our networks and services to give customers a better overall experience.’
How to save money on broadband and mobile phone bills as prices rise
Millions of households will endure steep hikes in the price of their broadband and mobile phone deals in just two months’ time.
But there are a few ways to lower the cost, which we explain here.
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However, in line with Ofcom rules Virgin Media O2 will not be putting up bills for customers on its social tariffs.
A social tariff is a cheap mobile or broadband deal only available to struggling households.
These deals are not open to all, and are mostly restricted to those on benefits, lower incomes or the elderly.
Most broadband firms rely on Openreach’s infrastructure to deliver broadband to consumers’ homes, and pay the BT-owned firm a yearly fee.
That fee rises with inflation every year, in line with Ofcom rules, and broadband providers would argue their costs have to go up by at least inflation too.
Not only this, but the firms say that a third to a quarter of their customers see no price increases due to being on a social tariff, vulnerable or on certain fixed-rate deals.
However, the cost to supply these people with broadband still goes up every year in line with inflation, meaning firms look to pass costs on to other customers.
But these reasons – normally mentioned secretively by mobile and broadband firms – do not explain why many of their prices rise by significantly more than inflation.
Nor do they explain why the now-common practice of adding a charge on top of inflation-linked rises is fairly new, with many providers only adopting this tactic in recent years.
Alex Tofts, broadband expert at Broadband Genie, said: ‘In 2023 Virgin Media, like many of the widely available providers, significantly hiked up their prices for customers.
‘This year, it’s poised for another hefty increase using the RPI figure, although with inflation easing, the jump is anticipated to be less dramatic.
‘The kick in the teeth for Virgin customers is that even if they are mid-contract, they will have no choice but to swallow the extra cost, as leaving may come with a hefty exit fee.’
Find the fastest and cheapest broadband – and see if you can save
Broadband, TV and phone contracts are notoriously sticky, with customers often allowing deals to run on for many years while providers raise prices.
But it may be possible for you to get faster broadband, a better TV package and an improved phone deal, while saving money each month.
It is always worth comparing prices to see if you can save – particularly as the cost of living crisis bites.
This is Money has partnered with Broadband Choices to offer readers the chance to easily search for the best and cheapest deals for their broadband, mobile and TV.
